I also used 8% for FICA savings, I added a generous 2% for compliance savings.
And the plan isn't claiming a $1 loaf of bread will drop to $.77 overnight. They are saying prices won't go higher and could, and probably would, go down due to lower costs.
The plan, as defined by the Fairtax.org groupies and the #1 NYT bestselling FairTax Book, both claim prices on average will stay about the same (with FairTax included). If they didn't anyone on a fixed income, or with accumulated savings would see their purchasing power destroyed.
You still haven't defined how a business can "lower prices using embedded taxes".
My point is that they can't lower costs significantly, because there are no sigificant embedded taxes besides payroll and income taxes, which the FairTaxers claim will be returned to the wage earners.
The FairTax proponents are mis-representing what their economist, Dale Jorgenson said about employee wages. In his testimony before the Nouse W&M Cmte. he said that takehome wages would go down, and that would allow the businesses to reduce costs, so prices could go down.
The FairTaxers are telling us that the FairTax plan will allow every wage earner to get a 25%+ take-home pay raise and still pay (on average) the same for goods and services. THis is a lie.
You, like many others, are ignoring the provision that every consumer will get a monthly check to reimburse them for the tax on basics like rent, food, etc.
They use an average of $400 a month for an individual. Look at their assumptions on that and their calculation then argue whether or not it it's believeable.
But you've called them liars when you are basing that on assumptions you've considered concrete. I've heard Boortz go through this many times and nothing is totally concrete. But the rationale is valid.
They are not saying that everything WILL go down 25% in price.
And what you quote Jorgenson saying makes no sense. How can takehome wages go down when your receive your gross pay to take home rather than a net pay with taxes withheld?
And they do not claim payroll and income taxes paid by business will go to the employee. Those withholdings from the employee will go to the employee. They are saying the matching payroll taxes (FICA, Federal unemployment but not state unemployment) and the corporate income taxes (or individual incomes taxes paid by non-coporate taxable income) COULD also be paid to the employee as any lowering of cost and/or increases in sales can.
I've read most of their proposal and it's full of details and the talking points you allude seem over absolute.
But this will be settled in the arena of legislation and votes. Good Luck.
The bottom line, this guy was a genius. He was willing to take anyone's bet that, in the future, any commodity would be cheaper. He was and is always right. Do you know why? Because anything that is a true commodity is subject to the overwhelming influence of a free people who are dedicated to commercial profit.
IOW, if oil stays at 67 bucks a bbl some wildcat will create a way to get more of it out of the ground, some scientist, motivated by profit, will find a substitute, some engineer will find a way for autos to get 100 MPG. Eventually. Always happens. AS LONG AS WE ARE FREE TO EXPLORE, RESEARCH, DELVE AND PROBE FOR PROFIT!!!
So let's put this in the context of the fair tax. Do any of you Squirrels understand the power of a free people? If we make taxpaying voluntary and link it with our fourth most motivating instinct, that of status, we will be economically sent to the stars.
Here is what all of the Procter and Gambel advertisers know: People have three things that sustain them: food, water and warmth. We have to have those three things to live, right?
What is the next motivation? According to most marketers (the people who have to figure this s**t out to make a living) it is status. Our staus in the community, our status within our own families, IOW, we care about how people think about us more than we care about our college winning a football game.
So, do any of you think that the status motivation will not be a huge tax? We are Americans FCOL. We want stuff. Especially if we have "made it". Our motivation for status is strong. If we have money we will spend money. And if we spend money the government will get its share under a NRST.
That is my diatribe on why a consumption tax is absolutely imperative.
I don't care how many disruptions occur or how many people may be inconvenienced, the fair tax, in some form, HAS to be the law of the land. If not, we are nothing but a bunch of slaves to one million bureaucrats and some government structure that we have let get out of control.